Google is acquiring some of HTC’s team members, including those who are already working on the Pixel smartphones for around $1.1 billion. Google and HTC confirmed this in press announcements, after months of rumours surrounding a possible deal between the two players. HTC says it will get $1.1 billion in cash from Google for this deal. Google will get HTC’s team members and “a non-exclusive license for HTC intellectual property (IP).”
The agreement will be subject to regulatory approval and is expected to be closed by early 2018. Pixel is the company’s smartphone offering, which originally manufactured by HTC, though the in-house design, etc was all done by Google itself. With the new deal, Google will gain all those team members who were already on the Pixel team and is also acquiring parts of HTC’s engineering and design teams.
This will presumably boost Google’s own focus on smartphone hardware, which has gone in-house with the Pixel series. HTC will continue to launch its own smartphones, but the company says this will ensure a more “streamlined product portfolio, greater operational efficiency and financial flexibility.”
The Taiwanese player also says they are already working on their next flagship after the HTC U11. So yes, HTC phones will continue to remain in the market, though we could see more premium offerings in the future. HTC will also continue focus on the Vive Virtual Reality business and invest in IoT, AR, AR, etc.
HTC says the rationale here is “monetizing their smartphone value chain, including IP portfolio.” On Google’s part, the focus with this deal is clear: They are committed to building smartphones, and that’s something the company has said quite a few times in the past year or so after the Pixel launch.
In blogpost, Google’s Senior VP for hardware Rick Osterloh wrote that for Google the hardware journey is not just about 2017, but for the next two five, 10, 20 years. The post explains,”Creating beautiful products that people rely on every single day is a journey, and we are investing for the long run.
That’s why we’ve signed an agreement with HTC, a leader in consumer electronics, that will fuel even more product innovation in the years ahead.”
It adds, “We’re focused on building our core capabilities, while creating a portfolio of products that offers people a unique yet delightful experience only made possible by bringing together the best of Google software—like the Google Assistant—with thoughtfully designed hardware.”
Overall the deal will give Google more control over Pixel the smartphone as those team members in engineering, design will now be entirely in-house. Google is launching the new generation of Pixel devices, include Pixel 2, Pixel 2 XL, a new PixelBook, on October 4 at an event in San Francisco.